A Virginia attorney has been convicted of helping defraud a construction company of $1.32 million in connection with a Clay County recycling factory that never materialized.
A federal jury convicted Daniel R. Goodwin late Thursday after hearing testimony for a week, said Carlton S. Shier IV, acting U.S. Attorney for the Eastern District of Kentucky.
Jurors convicted Goodwin on four counts of wire fraud and one count of conspiring to commit wire fraud. The wire-fraud charges carry a maximum sentence of 20 years each.
The scam at issue in the trial started in 2009, when officials of a Florida company called Waste Not Technologies said it planned to build a factory in Clay County that would recycle household garbage into items such as building materials.
The company said it would hire 1,400 people — welcome news in job-starved Clay County.
David R. Bennett, a managing member of Waste Not Technologies, hired Elza Construction of Laurel County to excavate the site for the factory.
Bennett got the company’s owner to put up $1.32 million as an assurance that he could complete the job, rather than posting a more traditional performance bond.
Bennett promised Elza would get the money back within about three months, and would be paid $44 million for the excavation work.
Instead, Bennett admitted he and others siphoned off Elza’s money for other purposes and didn’t pay for the excavation work, according to court documents.
Goodwin controlled the escrow account to which Elza wired the money, according to a news release.
Elza filed for bankruptcy in May 2011, listing a $1.9 million loan to finance its work on the factory site as one of its largest liabilities.
The others charged in the case with Bennett and Goodwin are Sidney A. Tarrant and Izhar H. Syed.
Bennett and Syed pleaded guilty and are scheduled to be sentenced in April. Tarrant has not been arrested, according to a court document.
Goodwin is scheduled to be sentenced in June.